Phthalides 1 and phthalans 2 with substituents in the heterocyclic ring have been prepared starting from o-dibromobenzene via sequential metal-halogen exchange reactions and treatment with appropriate electrophiles. Low temperabee are essential for the stability of the intermediates involved in these reactions. The free diketone 23 obtained from the phthalan 19 has potential application in the synthesis of a variety of heterocyclic systems.